Construction News

As the state prepares itself for political change, confidence levels within the construction sector in Queensland remain high, the latest survey indicates.

Releasing its December 2014 Survey of Industry Conditions, the Master Builders Association of Queensland said builders throughout the state who expect construction industry conditions to improve over the next 12 months outnumbered those who expect conditions to deteriorate by more than three-and-a-half to one. Those who expect the general economy to improve over the same time frame outnumber those expecting a general economic deterioration by two-and-a-half to one.

Builders also reported very modest improvements in actual business conditions on the ground, albeit off an extremely low base and with current market conditions still extremely soft.

Moreover, while expectations are highest in the south-east and far north, survey participants expect conditions to improve across all regions except for Central Queensland and Wide Bay Burnett.

The survey comes amid considerable levels of uncertainty following the surprise change of government after the recent state election.

Master Builders Association of Queensland executive director Paul Bidwell says there are a number of areas of policy concerning the sector which are ‘in play,’ including necessary reforms to contracts and home warranty insurance (originally set to come into force in March and June respectively but now on hold), outstanding approval decisions regarding a number of developments and reform of the planning system.

Moreover, the industry is expected be negatively impacted by the what is understood to be Labor policy to wind back reforms to workers compensation and right of entry laws introduced under the previous government. While Labor has yet to announce its infrastructure policies, it appears unlikely that its capital works program will be as extensive as that previously planned under the previous government as it has promised to abandon a planned privatisation program which would have freed up funds intended to be used in paying down debt and investing in public assets.

Still, Bidwell is optimistic the new government will take a measured approach toward any significant changes.

“We hope things are done in a measured way without any rash decisions,” he said. “You look into the past and governments of all persuasions have come in and scrapped things just because [the policy] wasn’t theirs.

“Hopefully those times have passed – we are not expecting that to happen and we sincerely hope it doesn’t.”

The survey comes as the industry undergoes a shift away from resource sector work in places like Central Queensland toward what is anticipated to be a recovery in residential building off a low base following years of extremely slow activity in places like the Gold Coast, Brisbane and the Sunshine Coast.

Despite this, Bidwell says the geographical breadth of optimism implied by the survey is welcome.

“Even in those areas which are directly linked into the resources sector, things have improved somewhat,” he said. “Whether that’s just the natural optimism of the industry or things have bottomed out and are starting to turn [time will tell].”

Despite the improved confidence, builders throughout the state continue to experience frustrations associated with regulatory processes.

While ‘lack of demand’ was seen as the most common inhibiting factor in terms of construction sector growth, more than 50 per cent of builders believe infrastructure charges, labour costs and planning approval processes are critical constraints on further industry growth.